ROI for IoT Part 1: Exploring the data generated by your connected product
The next big thing wouldn’t be the next big thing without some uncertainty about the value it brings to the world. Such is the case with the Internet of Things. If you’re reading this, by now you’ve most certainly heard some of the hype around the IoT and come across multiple predictions around the number of connected devices, positive economic impact, etc… There is no telling if/when these predictions will come to fruition, but I believe we can confidently say that the time is now to start to uncover how the IoT can apply to your business.
In order to do that we have to breakdown the applicable use cases and as a result define the return on investment (ROI) for implementing an experience to solve for the problems that were identified. For now let’s think about how to structure understanding the ROI for a solution.
To simplify how we attack thinking about ROI, I like to look at it in terms of a composite of three different themes: Data, Business Models and Customer Experience. For the first part of this 3 part blog series we will start by taking a look at how to take advantage of the data being generated by a connected product.
This data gives us visibility into the product life-cycle of a connected product, insights into who is using it and the opportunity to monetize the data being generated. I’ve expanded upon each of these below.
Product Life-cycle visibility
Perhaps the largest advantage of connecting a once dumb product is the ability to gain insight into the full life-cycle of that product. Traditionally product companies would only know what distributor and/or retailer their product was sold to, providing no insight into whose home, office, garage, etc… it was being used in. The ROI on this is fairly straightforward and probably the reason why we are seeing such a large increase in the number of smart products hitting the market.
Companies now have the ability to gather data about usage, potential defects, maintenance needs, when the product is no longer in use and many other aspects. However, this should not be done aimlessly, i.e. - don’t think you need to gather every data point from the product. To ensure you don’t fall into a data rabbit hole, identify the desired customer experience, metrics and the insights internal stakeholders need to make the right decisions to improve customer service and future product releases.
With the ability to retrieve data from a product about it’s usage, companies now have the unique opportunity to marry that data with information about who is using their products. We can now understand the profiles of the consumer, how, when, where they are using products and use this information to feed back into the product development process and improve future releases.
As mentioned before, careful consideration should be given into how the experience is designed around gathering this information. If we are to collect information about the user that requires them to provide it to us then we must be demonstrating value in return. Also, we should understand the exact data points we need to feed into any processes or backend systems (e.g. - CRM, ERPs, etc…) as to not open a firehose of data into legacy systems.
Data is the new currency and there is a great chance that the data you are collecting about the usage of products is valuable to a broad range of internal stakeholders, your customers and other potential partners as well. As you are identifying what data to collect from your products it will be important to also think about what downstream affect this data can have on improving your internal processes, customer experience and how other companies in your customer's’ journey could benefit from the information you are collecting.
As you are going through the ideation phase of your project you should involve internal stakeholders, talk to users and also potential partners to help you identify the opportunities that may exist to capitalize on the information being collected. This will help you identify where you can create value in the customer experience as well as internally.
Above are just a few key themes that breakdown how to get the most out of the data being generated by a connected product. The biggest takeaways are to start thinking about how the data will be used early on in the process and always keep the customer experience at the forefront of what you are creating.
Check out Part 2 of this three part series where we will explore how to think about new Business Models in the IoT and the potential ROI.
Also be sure to dig deeper into Solstice Mobile's IoT capabilities.